PITI: An acronym for Principal, Interest, Taxes, and Insurance for a fully disclosed house payment.

Partial Claim: Regarding FHA loans this is an additional interest free loan that FHA may finance to help a homeowner bring their current FHA loan up to date after the Borrower has missed several payments.

Payment due date: Contract language specifying when payments are due on money borrowed. The due date is always indicated and means that the payment must be received on or before the specified date. Grace periods do not eliminate the responsibility of making sure that payments are received by the lender by the due date. In most cases, lenders or creditors who receive payments past the due date will add a late charge and/or additional interest and fees.

Penalty Fees: Late fees, check bouncing fees, over limit fees, underpayment fees. Any fee charged by a bank, credit card company, or lender for not meeting the terms of the loan.

Periodic Rate: The interest rate expressed in daily or monthly terms. It is the APR divided by 365 for the daily rate, divided by 12 for the monthly rate, and divided by 52 for the weekly rate.

PHISHING: An on-line attempt to extract private information from a consumer in order to steal that person’s identity and use it to defraud lenders. A pop up or e-mail that appears to be legitimate appears in the consumer’s email or on-line session. This communication asks for information such as a Driver’s License number, Social Security number, Mother’s maiden name, MasterCard numbers, and other information that a person uses to establish accounts or change information on your accounts. It is strongly recommended that you exit from the message and go directly to the legitimate site that the Phishing request claims to be from and log in to that site. Compare requests or call them directly and submit any information that proves illegitimate as to Phishing expeditions. As a general rule, you should be the person putting yourself into the situation of giving your account information or Social Security # to a business. Once you have given that information to a business on-line, it is doubtful that they will contact you via e-mail to update information they already possess.

PIN: Personal identification number used for security purposes on bank cards (also known as debit cards or check cards) and credit cards. The rightful owner is required to select and memorize a four-or-five digit numeric code, which is required to use the card at ATM’s or other point of sale.

Plaintiff: The party to a lawsuit or civil proceeding that initiated the legal action; the party who is taking action against the defendant.

Points: A one-time charge by a lender to lower the interest rate of a loan. One point is equal to 1% of the loan amount.

Pre-Approved Credit Card: A credit offer where the potential cardholder has met some initial screening characteristics. An approved card notice does not necessarily mean that the consumer is guaranteed the credit card. Upon the consumer’s request the credit card company offering the card will review the consumer’s credit. It credit is approved a card is sent out.

Pre-Approved Mortgage: A credit approval for a borrower planning to purchase real estate within a specific period of time. The approval comes with a commitment from a lender that covers the buyer for a specific loan amount for a certain period of time and at a maximum interest rate and loan to value. It is especially helpful to have this commitment from a lender as it takes a lot of worry out of making an offer on a piece of real estate. Many sellers specifically demand and expect it of any buyer bringing an offer.

Predatory lending: Abusive lending practices that include making a mortgage loan to an individual who obviously does not have the income to repay it, overcharging for making a loan, or repeatedly refinancing a loan, charging high points and fees each time

Prepayment: Early payment on any loan balance. It can be subject to prepaymentpenalties if indicated in the contract. In the case of a real estate loan with a prepayment penalty, they have a clause in 99.99% (give or take a .001%) of them that states that the borrower may pay 20% of the original balance each year without incurring any prepayment penalty.

Prepayment penalty: Charges imposed by some lenders as a penalty for paying off a loan earlier than its original payoff date. Prepayment penalties are required to be disclosed to the borrower at origination of the loan process and again when the borrower signs loan documents.

Prequalification: The initial interview a home buyer has with a loan officer. During that interview the loan agent asks the borrower about their job history and income, debts they may owe and what the buyer would like to purchase. Specific loan programs are discussed. The lender should have gathered enough information to issue a prequalification certificate or letter on behalf of the buyer. Most real estate agents will not show a buyer property without them first having been pre-qualified by a lender.

Primary Mortgage Market: You!: the people who borrow money for home loans and Me!: the Loan Agent/Broker/Officer who take those originations to the lender who funds those loans and then sells them to the Secondary Mortgage Market.

Prime Rate: That interest rate that banks charge their best and most creditworthy customers. Many HELOCS use the Prime Rate as their Index value. See Adjustable Rate Mortgage for additional information.

Principal balance: The outstanding or unpaid balance due on a loan. It is the amount owed on the loan at any give time. It is the original loan amount minus the total repayments made to date.

Private Mortgage Insurance (PMI): A policy of insurance required by lenders on those loans that are above 80% loan to value. This insurance protects the lender from any default of the borrower for those funds above the 80% LTV that are not put down on the property. PMI can be removed after a specific number of years and by request of the borrower. A set of conditions will always apply, the most important of them being that the property has appreciated enough so that the owners have at least 25% ltv of equity in the property. As a means to avoid costly PMI premiums, many loan officers will originate a 1 st trust deed or mortgage and then a 2 nd trust deed or mortgage. The 1 st loan will be for 75 to 80% of the value of the property and the 2 nd loan anywhere from 5 to 20% of the value of the property.

Public records information: Information on events that are a matter of public record (courthouse records) related to creditworthiness, such as bankruptcies, foreclosures and tax liens. The presence of public record information on a credit report is viewed negatively by the credit industry.

Purchase Option (Lease to Own): See Lease to Own